EBK ECONOMICS
EBK ECONOMICS
20th Edition
ISBN: 9780077660710
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 21, Problem 12DQ

Sub Part (a):

To determine

The equilibrium wage rate and the quantity wage ratio.

Sub Part (b):

To determine

The equilibrium wage rate and the quantity of workers of Hispanicise.

Sub Part (c):

To determine

The wage ratio.

Sub part (d):

To determine

Which workers would be hired.

Sub part (e):

To determine

The new equilibrium wage rate and the quantity wage ratio.

Sub part (f):

To determine

The equilibrium wage rate and the quantity wage ratio.

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1. After the reopening of borders with mainland China following the COVID-19 lockdown, residents living near the border now have the option to shop for food on either side. In Hong Kong, the cost of food is at its listed price, while across the border in mainland China, the price is only half that of Hong Kong's. A recent report indicates a decline in food sales in Hong Kong post-reopening. ** Diagrams need not be to scale; Focus on accurately representing the relevant concepts and relationships rather than the exact proportions. (a) Using a diagram, explain why Hong Kong's food sales might have dropped after the border reopening. Assume that consumers are indifferent between purchasing food in Hong Kong or mainland China, and therefore, their indifference curves have a slope of one like below. Additionally, consider that there are no transport costs and the daily food budget for consumers is identical whether they shop in Hong Kong or mainland China. I 3. 14 (b) In response to the…
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